Detroit Bankruptcy Case Kicks Off

7/24/2013 12:31PM

A state appeals court on Tuesday put on hold a legal challenge to Detroit's bankruptcy, clearing the way for a federal judge to begin reviewing the city's filing. Stephen Eide, Senior Fellow at the Manhattan Institute, discusses the implications for the city, residents and workers. Photo: Getty Images.

This transcript has been automatically generated and may not be 100% accurate.

... I ... Michigan State appeals for halting a challenge to Detroit's ... bankruptcy filing that's allowing ... the first hearing on the case to proceed is ongoing ... right now to show Joinus right now to parse through all this means for the city ... and forced pension holders is Steve and I he is a senior fellow ... at the Manhattan Institute Center for state and local leadership High Steven think semester being with us appreciate that that ... is a critical day with ... unseeded biggest municipal bankruptcy sign in the U S going on ... how successful do you think they're going to be in today's hearing ... I think today's hearing which are going to stick with it too is basically try and use clear with some of the legal underbrush on there some lawsuits pending in cities ... using a retiree's and other groups have ... petitioned saying that this that that which cannot be allowed to access federal thinks bankruptcy court ... aam and so they basically keep all Detroit's legal issues on the state level to that which and which to which Brown using irons have more leverage against the city ... if the kids and a federal court to force leverage is going to increase center Sicily is trying to to to to targeted are going to the federal bankruptcy court is the only game you with this matter should be debate is that like to try for the race was won or lost is the correct ... right when you go into municipal bankruptcy with the main appeals from the perspective is when he gets a place on all other litigation against you can eat deals than anybody ever have had the chance to ... sew backing then when you go into federal bankruptcy all the things that interest has been a holistic way ... aam and you can focus on the main issue which is the debt keeps Detroit ... so it was afraid of of any of these other losses going for it they would essentially slowed the case down they could make it more expensive ... for Detroit is that ... the whole of these these folks find this the small seeded how successful the think their Adobe ... we went again to municipal bankruptcy court you have two sets but couple requirements to prevent you're insolvent ... if the proof that the steak and kidney authorization to do so ... in Detroit aam NE and an even bigger she didn't think they are ready with your creditors ... something that that theory itself was going to be in another month mess before you even get to hear this I think your pet everything is going to be experiencing so ... aam yet mean the creditors to stand to lose big in bankruptcy don't want it or to go into bankruptcy at all ... and the oneness of the process towns much as possible ... what's in Detroit has proven its credit has proven to be helpful for bankruptcy of handling a reorganization of this is now being incredibly confusing face what will we see ... well emergency manager last month party and other week old has asked of creditors how much he wants to cut everyone's claim ... on the silky if he gets declared eligible for bankruptcy you'll then have to put out was called the debt reorganization plan ... aam and then we will see if he wants to be as severe in discusses the settings on the last month ... and um you can expect the input the bondholders and a retiree's the pensioners ... onto professor claimed theory aggressively said becuz right in my my final question for you I mean you know a lot of talk about the retiree's detention holders ... but who really is Guinea get to the front of the line ... when it comes in if it with him when it comes to Detroit having to pay out here ... well the phrase consumers to use uses shared sacrifice there's going to be sacrificing all fronts he can look at what Wall Street been saying about women with retirees has been saying that in a lot of enemies around Detroit sales from this perspective to me that means he's been succeeding ... tight Steven I thanks renounces appreciate you being with this pink comeback us to